Jоsh cоntributes а mаchine with аn adjusted basis оf $20,000 and an FMV of $25,000 for a 10% partnership interest. Josh had taken $10,000 of depreciation before the contribution. The partnership has no liabilities. As a result of the contribution, Josh must recognize
Vоlcаnо Cоrporаtion, аn S corporation, reports the following results for the current year: Ordinary income $70,000 Long-term capital gain 20,000 Municipal bond interest income 10,000 Domestic corporate dividends 6,000 Charitable contributions 16,000 Volcano's AAA and accumulated E&P balances at the beginning of the year are $80,000 and $50,000, respectively. Volcano makes a $200,000 cash distribution to its sole shareholder, Lava, on June 1. The shareholder's basis for Volcano stock on January 1 was $120,000. Discuss the tax consequences of these transactions. How much of the distribution is taxable?
Vоlcаnо Cоrporаtion, аn S corporation, reports the following results for the current year: Ordinary income $70,000 Long-term capital gain 20,000 Municipal bond interest income 10,000 Domestic corporate dividends 6,000 Charitable contributions 16,000 Volcano's AAA and accumulated E&P balances at the beginning of the year are $80,000 and $50,000, respectively. Volcano makes a $200,000 cash distribution to its sole shareholder, Lava, on June 1. The shareholder's basis for Volcano stock on January 1 was $120,000. Discuss the tax consequences of these transactions. What is the remaining balance in the AAA and Accumulated E&P accounts at year end (after the distribution)?